The last time I weighed in on Beyond Meat (NASDAQ:BYND), I said, “With Americans changing their diets, retailers flocking to the opportunity, and the potential for big revenue growth, I believe BYND could trade closer to $160.” That was Feb. 14, as Beyond Meat stock traded at $113.
Then the coronavirus hit. State governments demanded that restaurants close their doors in response to efforts for “social distancing.”
Investors ran scared and grilled Beyond Meat to a crisp. While shares of Beyond Meat should be avoided, immediate-term, it’s another “blood in the street” opportunity to consider once the corona-chaos begins to fade.
Plant-Based Meat Demand Still Sizzles
Globally, there’s big demand for plant-based meat. So, it comes as no surprise the industry is seeing massive growth. Retail sales just in the U.S for plant-based foods grew 11% to $4.5 billion over the year leading up to July 2019, says Entrepreneur contributor Brian Kateman, as compared to 2% growth of U.S. retail food.
Better, the U.S. plant-based industry soared to a market value of $801 million in 2019. However, over the next five years, it could be worth up to $27.9 billion, according to research firm Markets and Markets. By 2030, the industry could be worth up to $85 billion.
And, according to NBC News’ contributor Martha C. White, “NPD found that 16 percent of Americans say they ‘regularly’ use plant-based alternatives to meat and dairy products, such as almond milk and meat substitutes. More unexpected, though, is that 89 percent of the people eating all of these tell NPD that they’re not vegetarian or vegan.”
Healthy Long-Term Rewards
Sure, Beyond Meat faces big competition from Tyson Foods (NYSE:TSN), Kraft Heinz (NASDAQ:KHC) and Conagra Brands (NYSE:CAG). But it’s tough to argue Beyond Meat won’t benefit from the massive shift to alternative meats.
At the same time, Beyond Meat continues to gain sales momentum.
Starbucks’ (NASDAQ:SBUX) CEO Kevin Johnson made a commitment to increase plant-based options at story. Restaurant Brands (NYSE:QSR), Burger King, White Castle, and Dunkin (NASDAQ:DNKN) are all adding plant-based options, as well. Even Denny’s just announced it will add Beyond Meat burgers at 1,700 locations. Subway is testing the Meatball Marinara.
That’s growth investors should not ignore.
Even Martha Stewart just partnered with Beyond Meat to help launch Beyond Breakfast Sausage. “Beyond Meat offers a better-for-you plant-based option to animal protein for people who are looking to change or expand their diets. I think it is important to start the conversation around plant-based diets. Reducing our meat consumption as we move toward the future is yet another important step in curing the environmental problems facing the world we live in,” she said.
The Bottom Line on Beyond Meat Stock
At the moment, Beyond Meat has been burned by the coronavirus scare. However, once the fear has subsided, opportunity will return. Demand for alternative meats, agreements with popular food destinations, and an endorsement from Martha Stewart can only help.
Once the fear subsides, I strongly believe shares of BYND can return to $150 a share.
Ian Cooper, an InvestorPlace.com contributor, has been analyzing stocks and options for web-based advisories since 1999. As of this writing, Ian Cooper did not hold a position in any of the aforementioned securities.
